Medicaid Enrollment:

Amid Declines, State Efforts to Ensure Coverage After Welfare Reform Vary

HEHS-99-163: Published: Sep 10, 1999. Publicly Released: Oct 1, 1999.

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Pursuant to a congressional request, GAO provided information on the decline in Medicaid enrollment, focusing on: (1) Medicaid enrollment changes for families and children following welfare reform, as well as associated key federal protections established for Medicaid; and (2) states' welfare-related policies and practices that can influence Medicaid enrollment.

GAO noted that: (1) between 1995 and 1997, Medicaid enrollment declined nationwide, but substantially less than welfare participation; (2) overall, Medicaid enrollment among the nonelderly and nondisabled adults and children declined by about 7 percent, compared with a 23-percent decline in welfare participation; (3) shifts in individual states' Medicaid enrollment for these adults and children during this period ranged from a 19-percent decline in Wisconsin to a 26-percent increase in Delaware; (4) while most states experienced declines in Medicaid enrollment, enrollment increased in some states, in part as a result of individual state program expansions; (5) on the other hand, Medicaid and welfare enrollment declines have been attributed to strong state economies, low unemployment rates, and new state welfare-to-work initiatives; (6) the smaller declines in Medicaid enrollment may also be due to federal eligibility protections built into welfare reform and ongoing expansions of Medicaid coverage for low-income children that predate welfare reform; (7) one eligibility protection that predates welfare reform--transitional Medicaid assistance--provides an additional year of Medicaid coverage for individuals who lose Medicaid eligibility as a result of employment or increased income; (8) the extent to which transitional Medicaid has affected national enrollment trends, however, is uncertain because of the lack of uniform reporting and tracking of this entitlement; (9) GAO's analysis shows that changes in state-level welfare policies and practices can both positively and negatively influence Medicaid enrollment; (10) recognizing that the income reporting requirements can limit beneficiaries' access to the transitional Medicaid entitlement, the Health Care Financing Administration (HCFA) has submitted a legislative proposal to eliminate these requirements for up to 1 year; and (11) GAO's work shows that increased state flexibility to ease reporting requirements could facilitate the transition from welfare to work and make Medicaid more available to eligible individuals.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Legislation has been proposed several times by members of Congress but has not been enacted.

    Matter: To further facilitate families' making the transition from welfare to work and to prevent income-eligible families from being terminated from Medicaid for procedural reasons, Congress should consider revising section 1925 of the Social Security Act. Specifically, Congress may wish to allow states to lessen or eliminate periodic income reporting requirements for families receiving transitional Medicaid coverage, provided that states offer adequate assurances that the benefits are reserved for those who are eligible. Actions in this regard could facilitate uninterrupted health insurance coverage for families that are moving from cash assistance to the workforce.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: CMS is about to issue a final report on its 50-state review of the delinking of Medicaid and TANF in the states. As part of these on-site reviews, CMS reviewed state compliance with CMS on the provision of transitional Medicaid. While the report notes compliance or barrier problems with the provision of transitional Medicaid, it does not determine the extent to which transitional Medicaid is reaching the eligible population.

    Recommendation: In order to ensure that eligible individuals leaving cash assistance do not lose Medicaid coverage, the Administrator, HCFA, should determine the extent to which transitional Medicaid is reaching the eligible population.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: In July 2000, HCFA reported that they began a year-long series of training for all states and HCFA regional offices on a wide array of Medicaid eligibility issues. In August 2000, it provided further policy clarification and discussed eligibility issues with states and its regional offices at the National Eligibility Conference. While HCFA did not release the final report, CMS reported to GAO that it is about to issue final reports on its 50-state review of the delinking of Medicaid and TANF in the states. As part of these reviews, CMS reviewed state compliance with CMS guidance on the provision of transitional Medicaid by reviewing state guidance, and discussing compliance with state officials, local caseworkers, and local advocacy groups. CMS reported that they identified compliance and barriers problems with the provision of transitional Medicaid. Additionally, CMS stated that it reports on states' actions, as well as CMS requested actions necessary to address these barriers.

    Recommendation: In order to ensure that eligible individuals leaving cash assistance do not lose Medicaid coverage, the Administrator, HCFA, should provide states with guidance or other appropriate technical assistance regarding best approaches for implementing transitional Medicaid in a manner that facilitates the full and appropriate use of this entitlement for eligible beneficiaries.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

 

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